Peru: Inflation drops to lowest level in over two years
May 1, 2013
In April, consumer prices for metropolitan Lima rose 0.25% over the previous month, which came in below the 0.91% increase recorded in March and was in line with market expectations. The monthly increase reflected higher prices for food and non-alcoholic beverages, which was partially offset by lower prices for transport and communications.
Against this backdrop, annual headline inflation fell from 2.6% in March to 2.3% in April, which marks the lowest level since February 2011. At its current level, inflation sits within the Central Bank's target of 2.0% with a tolerance margin of plus/minus 1.0 percentage points.
In its March inflation report, the Central Bank expects consumer prices to end both this year and next within a range of between 1.5% and 2.5%. LatinFocus Consensus Forecast panellists are slightly less optimistic and expect inflation to end 2013 at 2.6%, which is unchanged from last month's projection. For 2014, the panel expects inflation to fall to 2.5%.
Author: Ricardo Aceves, Senior Economist